Even after it signed a crucial oil treaty with its southern neighbor, the government in Khartoum has plenty to worry about.

Sudanese President Omar Hassan al-Bashir waves to supporters outside the Defense Ministry in Khartoum, just after hostilities with neighboring South Sudan ceased, on April 20th, 2012. (Mohamed Nureldin Abdallah/Reuters)

On September 27, one
of the most
repressive governments on earth was thrown a
lifeline. After an eight-month standoff that ravaged the two countries'
economies and brought them to the brink of war,
North and South Sudan resolved a long-simmering dispute over how to divide
their oil revenue, the primary source of tension after the South became
independent in July 2011. The relationship between the two countries is still
one of suspicion, proxy warfare, and seemingly-insoluble border disputes that
provide a plausible casus belli if
either needs an excuse to ratchet up pressure. Even so, the deal allows for the
possibility that within the next six months, oil will again start flowing for
the first time since February 2012, restoring a revenue source that each
government desperately needs.

The oil deal is added
evidence of the Khartoum government's astounding ability to weather whatever
challenges a polyglot and deeply unstable region throws its way. Since taking
power in a 1989 coup, Sudan's National Congress Party, led by the International
Criminal Court-indicted Omar al Bashir, has proven itself to be one of
the more adaptable cadres of autocrats the modern Middle East and Africa has
ever known. In the 23 years since they came to power, they have morphed from revolutionary
Islamists into pan-ideological opportunists -- all while effectively
defanging or co-opting the country's other political parties, which are some of
the oldest and most respected in the Arab world. At various times, the NCP has
gotten Iran, the Gulf States, and the Arab League to arm it, fund it, or
provide it with crucial political cover. It has used sprawling patronage
networks, which extend from local militias all the way to the upper ranks of
the military, to turn the country's numerous armed conflicts in its favor. And
it has waged scorched-earth campaigns against insurgencies in Darfur and Southern
Kordofan -- while deploying less-violent and more tactical methods
against peaceful anti-regime activists in places closer to the centers of
power.

But there is now ample
evidence that the NCP's flexibility is reaching its limits. The regime is
facing a crisis because of a basic dilemma: Khartoum is running out of money,
and the government is facing fiscal and economic challenges that can only be
avoided if its nature and basic outlook undergo a dramatic shift.

The fact that Sudan is
not a democracy limits
the possibility of
such a shift. If the Sudan were ruled by a government beholden to voters,
rather than to its exclusive self-interest, the governing clique would not have
to be counted on to give up its privileges -- to voluntarily change its
fundamental nature, or its philosophy toward governing a populous, complex and
volatile country. Yet as Yousif Elmahdi, a Khartoum-based economist and democracy
activist explained, the NCP now cares about short-term resiliency to
the exclusion of all else. "The regime is so fragmented and so
fragile," he said. "There's no ideology, no common goal, no common
vision. It's basically survival from day to day."

Elmahdi said that the widespread
protests that gripped Sudan over the summer offered a glimpse of the
popular frustration that could bring down the NCP. "People are
oppressed," he said. "There's a lack of basic freedoms, conflict,
poverty -- you name it. Any governance issue you don't want to have, we have in
Sudan."

Even so, he doubts the
government will fall unless there are paralyzing street protests that would
convince more opportunistic elements in the NCP to side against the regime's
current leadership. And those won't materialize unless Sudanese see an economic
imperative in ousting the government. "It hasn't gotten to the level where
we're looking at the revolution of the hungry," said Elmahdi. "If
we're going to eventually break this fear barrier outright, the economy's going
to be the reason. People are going to go out because they won't have a choice
anymore."

"There's no ideology, no common goal, no common
vision. It's basically survival from day to day."

It's impossible to
know just how far off that is -- the NCP might be able to stretch its resources
and preserve
its network for several more years. The possible Israeli bombing
on October 24 of the Yarmouk weapons facility -- a sprawling munitions factory in
southern Khartoum and the site of what might
have been a large cache of weapons bound for Hamas and Hezbollah -- exposed
the regime's strategy for survival. The NCP has made itself indispensable to
Iran's weapons-smuggling network in Africa; one U.S.
State Department cable published by WikiLeaks reported that the facility
had handled "items
on a multilateral control list, or other items that have the potential to
contribute materially to WMD, missile, or certain other weapons programs in
Iran or Syria."

But the bombing, which
saw Sudan's capital city attacked partly because of the recklessness and
opportunism of the ruling party, also revealed the destabilizing consequences
of such an approach. As one
analysis concluded, Sudan is now a front in Israel's conflict against Sunni
terrorism and Iran. The Yarmouk incident hardly suggests a government
interested in pursuing a more moderate course. And there's plenty to suggest
that its current path can't be sustained forever. The attack on the capital must
have been embarrassing, but the NCP has much bigger problems on its hands.

* * *

The most telling signs
of looming problems for the NCP are economic. Sudan's economic troubles partly
stem from the loss of its oil income in July 2011 after the South Sudan became
an independent state -- the country was already running a $2.5 billion trade deficit in the six months between the south's secession and the oil shutdown. In a dispute over how the countries would divide their
oil revenue, the South froze its oil exports in February 2012.The two sides
resolved the issue thanks to an agreement in late September, but only after
eight months of economic disaster for both countries. In Sudan, a country that
depends on oil for half of its government revenue and 90
percent of its export revenue, government salaries and subsidizes were
cut, and the price of electricity and fuel doubled. Official inflation
skyrocketed to 42 percent, although Elmahdi said that the actual rate was
closer to 65 percent according to estimates he conducted this past March.
Inflation had a major impact on the price of basic foodstuffs, since Sudan
imports nearly 100 percent of its wheat. Elmahdi said the government, which is
currently in $4 billion of debt, had to take out a $700 million loan from China
(which buys 66
percent of Sudanese oil) simply to be able to keep importing fuel and
wheat.

"If they've
reached the stage where they don't even have the liquidity to import the most
basic necessities -- necessities that would ultimately make or break the regime
-- if we don't have diesel to run factories or to run public transport, then
basically it's over for them," said Elmahdi.

Flames engulf the Yarmouk munitions factory after what might have been an Israeli attack on October 24th. (Reuters)

The current situation
in Sudan is a master class in how dictatorships endure long after their
ideological appeal has faded -- and far beyond what would seem to be the
logical point of viability. The NCP has used a combination of militarism and
patronage to stay in power, and the two often work in lockstep: for instance,
the NCP has provided organization,
weaponry and even government salaries to irregulars fighting the
insurgencies in Darfur and South Kordofan. It's replaced the upper echelons of
the military with regime loyalists, and beefed up the NISS, the domestic
intelligence agency. "The government of Sudan amazes in its ability to
survive," said Freedom House's Ahmed Kodouda. "The government will
continue to find agreements, create coalitions and engage various actors,
regardless of their positions or the impact on the actual country's foreign or
domestic interest, for its survival."

To that end, the
Sudanese government spends $4
million a day, and, according to Elmahdi, 88 percent of its budget, on
defense and security. One of the regime's top priorities has been to maintain
its control over a vast and compartmentalized security apparatus. For instance,
as Magdi El Gazouli, an economist and fellow at the Rift Valley Institute explains,
the government maintains a bank "dedicated to giving cheap loans to junior
military officers and security officers." Still, the bank had to be bailed
out by the Sudanese central bank three times even before the southern oil
shutoff. And after the shutoff, it is clear that the government is struggling
to balance its patronage network against the need to maintain a functioning
state and society.

The NCP is a master class in how dictatorships endure long after their initial
appeal has faded.

"[The
government's] problem is with the salaried class in Khartoum," said
Gizouli. "These are the people the government doesn't have enough money to
pay. They depend solely on their salaries. That's why you see occasional
wildcat strikes in Khartoum. It's very, very frequent." He said that a
week before our conversation in early October, over 150 employees of a
state-owned bus company went on strike in Khartoum, in response to long hours
and dwindling pay. "The transport system in the capital sort of was at a
standstill for two days. People had to walk extensive distances to get to work."

Bus drivers, teachers
and industrial workers haven't been drawing a consistent salary -- all have
gone on strike recently, according to Gizouli. But militants, some of them left
over from conflicts that ended years ago, apparently still are. "I can't
even count how many irregular government militias there are in town," said
Elmahdi. "There are so many different militias guarding this regime. It's
absolutely unbelievable."

* * *

It's possible that
even with the oil industry up and running, Sudan will not be able to regain its
old sources of credit and income. For years, Khartoum has depended upon the
Gulf States for loans and investment. The Kanana Sugar Company, one of the largest
sugar producers in Africa, is jointly owned by the Sudanese and Kuwaiti
governments. Meanwhile, the Qatari government provided Khartoum with a $2 billion
line of credit earlier this year. But, as the Yarmouk incident
highlighted, Khartoum enjoys close relations with Iran that include a "military
cooperation agreement" and the stationing of
Revolutionary Guard soldiers in Darfur. This is hardly the only reason Sudan
has blown its goodwill with the Sunni Arab states: Qatar hosted and funded an abortive peace summit for
the Darfur conflict in 2009 and 2010, a failure that has done little for
Qatar's diplomatic prestige -- or for Darfuris, nearly 3 million of
whom are still displaced. Qatar is providing aid and development money for
Darfur, but Bashir apparently failed to obtain additional debt relief during a
visit to Doha in August. In September, the Sudanese government appealed to
Saudi Arabia for aid and debt relief, and received an amount almost
calculated to embarrass it. At the height of the oil standoff, the Sudanese
government found
few takers on an attempt to give away farmland to Emirati developers.

At this point,
Khartoum has very little it can borrow against. Sudan's state oil enterprise owns little
more than five percent of the Greater Nile Petroleum Operating Company, one of the
consortia established to extract and develop the Sudan's resources--indeed,
the country's oil industry is a foreign project, largely owned and operated by
China's national oil company and Petronas, the Malaysian energy giant. As
Kodouda explains, Sudan has already leveraged its oil resources about as much
as it possibly can. "All the pipelines in the country have been built
using futures," said Kodouda, "and a lot of them are still owned by
Malaysian and Chinese companies." Attempts to diversify the economy
have proven farcical: in July, a $1 billion sugar refinery opened "several years"
behind schedule, partly because international sanctions made it difficult for
the Sudanese government to find a company willing to program the facility's
machinery.

What about farming?
Due to the oil boom, brain drain, and decades of official neglect, the
once-functional irrigation systems serving the Jazirah region, the potential
breadbasket lying between the White and Blue Niles, are largely silted over and
unusable. As Gizouli explains, sub-competent private companies owned by various
NCP allies are now responsible for irrigating the country's potentially-verdant
interior -- and have let the Sudan's agricultural infrastructure, once of the
envy of Africa and the Middle East, go to rot. "You probably see more
Sudanese agricultural engineers and irrigation engineers working in Saudi
Arabia than in Sudan," he said. "The combined loss of know-how and
investment in agriculture, and the administrative shambles that the [irrigation
scheme] has become, produced this outcome that despite being this very rich
area, Jezira is not producing anything."

Animal husbandry isn't
promising, either. For years, the NCP has bought and exported cattle raised by
government-allied tribes on the country periphery. This is a convenient and
mutually-beneficial form of patronage, according to Gizouli.

"For the NCP it's
important to keep all of these groups very happy," he said -- including
the Janjaweed, the vicious, pro-government militant pastoralists in Darfur. But
it's hardly the path toward a more modern, high-yield agricultural sector.
Worse still, it could even have a negative impact on food security, said
Kodouda. "The government decides to export the vast majority of livestock
at the expense of the ability of local individuals in Sudan to purchase
livestock. The price of a sheep has tripled or at least doubled in the last
year," he said.

"There isn't a shortage of Sudanese professionals outside
Sudan."

These aren't even the
only problems the country faces. As Gizouli explains, a huge percentage of the
educated, skilled labor pool has left Sudan, and is living in either Europe or
the Gulf states. "There isn't a shortage of Sudanese professionals outside
Sudan," he quips. This is arguably beneficial. Officially, the Sudan is
starved for foreign currency: the International Monetary Fund currently
believes that the Sudanese government has less than two
months' worth of foreign reserves left if it continues to import at
its present rates. Yet Gizouli said that those estimates fail to take
remittance money into account. Sudan has a consistent, seemingly politics-proof
source of foreign currency. But it is seldom a good thing for so much of a
country's professional class to be living abroad, especially when unskilled labor
is also fairly difficult to come by: Gizouli explained that the secession of
the South and the subsequent hostilities between the countries froze the
typical inflow of cheap laborers from South Sudan, and led to an exodus of
southern refugees who had lived in and around the most fertile regions of the
Sudan for decades. Skilled workers are living abroad, while the availability of
unskilled labor is conditioned on shifting and erratic political winds.

So the Sudan faces
crippling debt, a suffering and over-leveraged oil industry, an irrelevant
agricultural sector, and a shortage of both skilled and unskilled labor -- on
top of international
sanctions, Israeli bombing sorties and a regional and international
pariah status that only appears to be getting worse. Meanwhile, the regime's
survivalist instincts have only deepened its long-term problems. The
maintenance of its exclusionary and nominally-Islamist rule almost requires the
NCP to alienate the countries on which it depends the most. The government
has to keep insurgents in Darfur and Southern Kordofan at bay -- although the
humanitarian disaster there is a major obstacle toward normalization with the
United States, and for debt relief or World Bank loans. The NCP has to maintain
its patronage network -- but it does so at the expense of the country's
professional and civil-service class. It prioritized relations with Iran, the
one other self-perceived revolutionary Islamist government in the Muslim world
-- but that has meant alienating the Sunni states it used to depend on.

These trade-offs have
proven ruinous, but they've also enabled the regime to endure through two
decades of chaos and war. The NCP can rescue the embattled Sudanese state. But
only if it turns into something dramatically different than what it currently
is.

The Middle East and
Africa are pock-marked with autocratic governments that have entrenched their
rule while holding out the vague possibility of reform: there was a time when
western-educated autocrats like Bashar al-Assad and Saif
Gadhafi seemed like possible agents of peaceful, democratic
transition. But Syria and Libya are vivid examples of regimes that, when faced
with a final, defining choice, opted for state collapse over fundamental change
-- the near-term bid for regime survival, over the long-term certainty of
reform. Although its structure and governing philosophy are different from
both, the NCP has made much the same decision as the Gaddafi and Assad regimes.
Perhaps the question isn't whether the unsustainable nature of its path will be
exposed or whether there will be a dramatic Tahrir or Aleppo-like
moment when the NCP's failure is finally sealed. Perhaps the question is when
and how that moment will take place -- and how much violence it will leave in
its wake.

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